The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has announced its decision to launch a pilot Global Payment Initiative (GPI) service which aims to compete with the growing threat of competing blockchain and fintech solutions provided by institutions like Ripple, JP Morgan and Transferwise.
Still in its initial stages, the ambitious pilot aims to “build the foundation of a new integrated and interactive service that will significantly improve efficiencies in the payments process and which will ultimately be made available to all 10,000 banks across the SWIFT network.”
A recent GPI test, was successfully conducted in October, carrying out instant cross-border payments with banks in China, Singapore, Thailand and Australia. Equipped to enable speedy identification and elimination of errors and omissions in payment data such as missing or incorrect beneficiary information or incomplete regulatory information, SWIFT hopes the GPI payments service will enable speedy and seamless transactions, thereby reducing delays and costs, as well as improving customer experience.Taking on Blockchain’s Threat
With the move, SWIFT has turned its attention to containing the threat of blockchain-based fintech startups offering the same services at a cheaper price. One such blockchain project is J.P.Morgan’s Interbank Information Network (IIN). Launched in September, it now boasts a membership count of more than 130 banks, including Satander and Societe Generale.
IIN, claims to minimizes friction in the global payments process, enabling payments to reach beneficiaries faster and with fewer steps. With its membership still growing, IIN promises banks the ability to resolve errors and compliance issues speedily by sharing information on a mutual distributed ledger.
SWIFT’s GPI, on the other hand, uses an Application Programming Interface (API) which enables banks to access each other’s data to validate recipient account ...